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I hate the Lightning Network now, I think it's ridiculous, and I think it's become a
complete delusional cult.

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You know, I tried to explain this to Michael Saylor once, I had the opportunity to
meet him in person.

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Many people have tried over the years to push the transactions per second with
alternative tech,

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and it's unfortunate that in the Bitcoin community, no one will pay any attention to
that.

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So it's kind of like, the L2 is kind of like dying in a video game or something.

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I'm going to die!

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But the L1 is like dying in real life.

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Supported by Cascade. Use your Casper without selling it.

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That's amazing. That's amazing.

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So I think you brought up the point which I wanted to get to, which is, you know,
obviously you're busy.

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You're not only building, well, it's going to be LayerOne, though LayerOne is coming
from Bitcoin.

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But there's a lot more, it still needs to go into LayerOne.

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And then on top of that, LayerTwo, right?

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Because that's where the magic happens with the blockchain stuff, right?

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So I want to get into a couple of flagship drive chain stuff.

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You know, drive chain projects that you got planned, right?

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Seven of them you've got planned.

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I probably will get into one or two today.

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So we got to start, I thought we can start with Thunder, given it's one of the early
ones,

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along with Truthcoin that you've been behind for some time.

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So why don't we start with Thunder?

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I want to get into, you know, all the stuff you're building there.

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So why don't we start with Thunder?

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What is Thunder and, you know, why are you specifically, you know, excited about it?

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First, let me lay out this, like, picture of, like, Thunder and Zside.

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Those are, like, the kind of, like, the bread and butter.

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Like, these are, like, really, really good and they're really, really finished,
mostly.

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And then you kind of have more – we have more experimental ones.

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So, like, BitAssets, BitNames would be, like, the next category of, like,

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very interesting thing that's kind of a little ambitious and mostly done and mostly
works

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but still not quite 100% sanded down yet.

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And then you have, like, more, like, confusing and ambitious, complicated ones.

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These would be, like, the prediction markets.

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But it's a coin shift.

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And we actually – now we have some – Zside is from outside.

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But we have another outside contributor, this guy Jay, who he did Elements Plus.

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So it's, like, Blockstream Elements but as a drive chain.

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So it's, like, an eighth one, actually.

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Yeah, we have one called Photon.

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Photon, which is Demos' quantum-resistant signatures.

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But it's on the L2.

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So that's why I was kind of thinking it kind of more belongs on L1 because this is,
like,

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a paranoia thing for people.

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So anyway, I just wanted to lay that out.

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But it's, like, yeah, Thunder.

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Because Thunder gives scalability and Zside gives privacy, gives a Zcash-level
privacy.

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So Thunder is basically just drive chain with, like, a lot of stuff stripped out.

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So it's very efficient and has a large block size that grows.

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And it's been heavily optimized.

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So we did a similar contest last summer.

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We said, how fast can you make Thunder go?

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And we tested it with larger and larger blocks and with computers of various,

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you know, standardized computers and stuff.

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So Thunder by itself.

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And the plan for Thunder is to have actually something like 12, 13, 14, 15 maybe of
these

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where they're each in, like, a different region.

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So at first there would just be one Thunder.

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But eventually there would be, like, a North America versus Asia Thunder.

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And then eventually there would be, like, a Southeast Asia versus rest of the world.

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And then eventually there would be, like, North America, Western Europe,

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Oceania or whatever you want to say, like, Africa plus rest of the world.

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So it would kind of start splintering off organically.

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And that's the idea.

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So we just released one, and it has a large block size that grows geometrically.

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But the idea is that it would be, you know, you'd have plenty of block space there,

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and then it would fill up, and then you would launch, like, a second one.

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So you have a lot of opportunity even just while you're using the first one to say,

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like, make, like, your wish list of, like, oh, here's what I wish we had done
differently.

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You have, like, Thunder B or Thunder 2.0.

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When this first Thunder fills up, because even though it's growing geometrically,

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you think the adoption might grow faster than that.

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And so then you can always put up the second one.

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And so that's the idea is that with these L2 chains, just with the raw block size
alone,

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you can process all of the transactions in the world.

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And I did some back-of-the-envelope, you know, napkin math about, like,

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everyone in the world does three transactions a day or whatever it is.

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Or, you know, you can kind of play with the numbers because some people are not
making it.

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Some people are really, really old or really, really young or whatever.

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So you can do whatever you like with the numbers.

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But it's, like, on the order of a few trillion transactions per year.

81
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And so this software has already been tested as of the contest.

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I wrote about this in the contest right up myself.

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It has already been tested to basically 50 percent of the entire world's transaction
throughput.

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So that was last year, and stuff will continue to improve.

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As I said, it will continue to improve in the sense you launch the first one,

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people will actually be using it in the real world.

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But that doesn't mean, like, the R&D will stop.

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People will keep improving that one, and then they'll also be thinking,

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oh, and when we launch the second Thunder, we could make it a lot better.

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And then, of course, you can always have more Thunders.

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So, of course, each time you do, you kind of split the network.

92
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But usually if you live in North America, you mostly transact in North America.

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You know what I mean?

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You're mostly buying when you buy food, when you buy gasoline,

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when you buy whatever you're buying.

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Because the economy is so big that you can get most of what you need.

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And then only a few times when you go to Europe do you have to swap your U.S.
dollars for euros.

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So it's actually okay to have some partitioning.

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And I think that we could have – we could make one network work for a while

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and then have a second network.

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So this is part of the plan to scale.

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And so one contrast between this and the Lightning Network,

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which now I – I hate the Lightning Network now.

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I think it's ridiculous, and I think it's become a complete delusional cult,

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which is that we have tested – we have already tested it.

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You can run the test on GitHub.

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It's open source where we create a bunch of fake transactions.

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By a bunch, I mean like a huge number.

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And it actually – the test – like most of the time of the test is spent like
prepping

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with this random, giant random vector of transactions.

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And then it will collect these as if they were real.

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So we've already tested it to the rate of this global transaction rate,

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and you can kind of see for yourself exactly what happens.

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The Lightning Network, you couldn't even do this type of test.

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It wouldn't even be conceivable.

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No one would even imagine to do it.

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And so that's – I just think we're in a completely different class of seriousness.

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Lightning has all these problems with liquidity, onboarding, et cetera, et cetera,

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et cetera, et cetera, giant list, and we don't have any of this stuff.

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So this is going to be your – as you're saying, this is a big block proposition
here, right?

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So this is huge, almost a gig block, right, 960 MB.

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So that's the size of the block, right?

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Which, again, I –

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Yeah, yeah.

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And obviously that means you can do a lot more transaction TPS, right?

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Throughput, you can do a lot more, right?

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Because Bitcoin is 3 to 7 right now TPS.

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Bitcoin Cash would be, what, 200, 100 to 200.

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And you are thinking with this massive block, right?

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It's like, what, 11,000-ish TPS?

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Probably 12,000.

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I don't remember.

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I have the exact numbers and the exact arguments in the contest post.

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So I would be much better for people just – and the links to the tests and stuff.

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So it would be better for people to look at that.

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It's just easier when you have – as you say.

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It's just interesting that we've tested it with those.

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So, of course, when you do something like that, the full node requirement does go
up.

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Like it's harder to run.

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But if you think about it a certain way, like imagine – like right now there's
whatever it is.

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It was 9 trillion transactions a year like in 2022 when I did the back of the
envelope map.

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But whatever, let's say it's 15 trillion transactions a year.

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Those have to be stored somewhere if they're computer transactions.

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So I lay out this is exactly like how it – what the cost and the expectation will
be.

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And we have the tests running with that.

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So I think this is kind of like – this is like the best case scenario it's going to
get.

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And I think this is much – and then you get the Bitcoin SV people who are like, aha,
big blocks.

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But it's not really the same because the Bitcoin SV people, they neglect the –

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if this full node gets really, really expensive in Bitcoin SV, then they've got
nowhere to go.

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But whereas in the drive chain world, it's kind of like if one network gets too
expensive,

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either everyone can abandon it or everyone can say, well, this experiment was a
failure.

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And we should scale some other way or we should have slightly smaller blocks but
higher fee rates to deter people from using it.

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So you can be much more experimental in L2.

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When you have an optional L2, it's completely different from mandatory L1.

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So it's kind of like – the L2 is kind of like dying in a video game or something.

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You can respawn.

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But the L1 is like dying in real life.

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And so it's a really big difference.

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And as you can see, of course, people are a lot more willing to play certain video
games where you're likely to die,

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like a war game, like a Call of Duty type of a game.

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It's much more fun to do that kind of game when you don't really die.

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So then it changes the type of stuff that – so, yeah, we're pushing the envelope on
danger deliberately.

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But, yeah, you can run the test for yourself and see that this achieves an enormous
amount of transaction throughput.

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And, yeah, again, Lightning, like it would never even – they would never even think
to do this.

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Because first of all, they know they can't actually even set it up.

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So they would not even be on anyone's radar.

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But this is just – everyone's still obsessed with the Lightning Network.

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And they probably – you can't – it's become a cult, and you can't get people out of
a cult.

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It just can't be done, unfortunately.

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You have to just wait patiently.

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Yeah, I think I was going to bring up SWE because it's very – it seems –

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I think the comparison you've done is very good because it shows Layer 1 versus
Layer 2 difference, right?

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Of course, I think there is a discussion to have here to discuss Node because,
obviously, Nodes are going to get huge.

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And, obviously, there's a cost associated to it, right?

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And if you want a lot of decentralized Node, you have to think about, obviously,
costs for so many people, right?

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But I think I like the way you're thinking about it, that it's more of an experiment
that you're thinking of doing it.

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It's not a set in stone for now.

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Yeah, and many people have tried over the years to do – like to push the
transactions per second with alternative tech.

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And it's unfortunate that in the Bitcoin community, no one will pay any attention to
that because – well, first of all, because there's been years and years of just
terrible tech and bad promises.

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So everyone has been trained to just assume that it's all bad.

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If we had sidechains, drivechains, if we had BIP300 – again, I proposed back in
2015.

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If we had had it the whole time, people would be trying these new types of things as
L2 drivechains of BTC.

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And then everyone would be much warmer to them because they'd say, oh, this is a
Bitcoin project.

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And this is not like an investment scam.

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You just try – you move $20 worth of coins over there and try it out.

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Or in the drivechain case, you can even get – you can get onboarded directly to the
L2.

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So you could just say, oh, someone could just send like 10 cents to me over there.

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And then you could see for yourself, okay, is this worth the tradeoff?

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Because, yes, because some people have pushed the envelope in maybe an unwise way,
although you never know.

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Maybe it's ingenious, but maybe it's terrible because it's like maybe you don't
actually want it to be – to cost 1 ten-thousandth of a cent for each transaction
because maybe that doesn't actually add up at the end of the day.

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00:13:08,000 --> 00:13:16,000
Maybe that just adds up to a disastrous node cost and then a free rider problem and
stuff like that.

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00:13:16,000 --> 00:13:22,000
But the point is we don't – no one really – we're not in a situation where people
can do the experiment.

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So we all suffer as a result because you've got all these smart people who are
trying this or that.

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00:13:28,000 --> 00:13:32,000
And, yeah, the whole innovation ecosystem has collapsed as far as I'm concerned.

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00:13:32,000 --> 00:13:36,000
Like back in 2014, it was very different, and people were more optimistic.

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00:13:36,000 --> 00:13:38,000
They were more techno-optimistic.

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And now, as we know, in Bitcoin, everyone's just like, oh – people say, oh, we
didn't even want – we don't want – we never wanted privacy in Bitcoin.

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They'll say weird stuff like that now.

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00:13:52,000 --> 00:13:54,000
And they say you shouldn't use Bitcoin.

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00:13:54,000 --> 00:13:56,000
And they have Michael Saylor saying, oh, it's digital credit.

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00:13:56,000 --> 00:13:57,000
It's digital capital.

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00:13:57,000 --> 00:13:59,000
It's digital Manhattan real estate.

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00:13:59,000 --> 00:14:03,000
But then he was saying – again, he was saying, oh, Bitcoin is money.

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It's not that complicated.

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00:14:05,000 --> 00:14:10,000
He was like, what about this giant list I have of you saying that Bitcoin is all
these other things?

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So I don't even know what to do with some of these people.

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It's kind of like I don't know.

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00:14:15,000 --> 00:14:22,000
But as we know in Bitcoin, new technology, it doesn't get attention.

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In fact, it basically gets scorn and hatred and abuse.

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00:14:27,000 --> 00:14:31,000
So that's – how can we get anything – how are we going to get anything better under
those conditions?

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00:14:32,000 --> 00:14:37,000
I like the philosophy because there is – I think there's a lot of experiment done
outside Bitcoin.

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00:14:37,000 --> 00:14:48,000
Like you could also look at DAGs that exist where you could have instead of linear
blocks, you could have multiple blocks running in parallel.

213
00:14:48,000 --> 00:14:50,000
Because they exist and they've been proven.

214
00:14:50,000 --> 00:14:56,000
There are projects like Subcaspa and Ethereum has even played around with it in the
past.

215
00:14:56,000 --> 00:15:02,000
So I think – but I like the way you're thinking about it because it really shows
that it's not like set in stone.

216
00:15:02,000 --> 00:15:03,000
It's like let's give it a try.

217
00:15:03,000 --> 00:15:05,000
Let's see how far we can push it.

218
00:15:05,000 --> 00:15:07,000
Let's understand the actual issues.

219
00:15:07,000 --> 00:15:09,000
And you can only understand once you deploy it.

220
00:15:09,000 --> 00:15:12,000
So I like that kind of mentality.

221
00:15:12,000 --> 00:15:14,000
The old days of Bitcoin, I guess.

222
00:15:14,000 --> 00:15:18,000
How Bitcoin used to be where people were pushing the envelope a little bit further.

223
00:15:20,000 --> 00:15:22,000
Yeah, everyone used to take it for granted.

224
00:15:22,000 --> 00:15:24,000
They used to say, well, Bitcoin is open source.

225
00:15:24,000 --> 00:15:27,000
So if anyone invents anything cool, we'll just add it to Bitcoin.

226
00:15:27,000 --> 00:15:30,000
Now we've gone completely to the other direction on that.

227
00:15:30,000 --> 00:15:36,000
And now that's – even to say something like that is unthinkable or kind of like
people would just laugh.

228
00:15:36,000 --> 00:15:39,000
They would just laugh if you said that today and say, no, we don't do anything.

229
00:15:39,000 --> 00:15:44,000
Bitcoin is the thing that we don't need any ideas because we're already perfect.

230
00:15:44,000 --> 00:15:50,000
It's hard to run an open source software project that way, especially in a world
where stuff is changing all the time.

231
00:15:50,000 --> 00:15:52,000
Internet speeds are changing.

232
00:15:52,000 --> 00:15:55,000
We have stuff like Starlink now.

233
00:15:55,000 --> 00:15:57,000
Computers improve.

234
00:15:57,000 --> 00:16:03,000
The way people use a computer has changed where there was a time when no one used a
computer.

235
00:16:03,000 --> 00:16:05,000
Then there was only the desktop.

236
00:16:05,000 --> 00:16:08,000
Now people are mostly on their phone.

237
00:16:08,000 --> 00:16:11,000
Some people don't even own a laptop or a desktop anymore.

238
00:16:11,000 --> 00:16:15,000
So all this stuff is constantly in flux.

239
00:16:15,000 --> 00:16:18,000
And as you say, new stuff is being invented.

240
00:16:18,000 --> 00:16:20,000
There was a time with USDT.

241
00:16:20,000 --> 00:16:22,000
There was no USDT.

242
00:16:22,000 --> 00:16:25,000
There was only like Bitcoin and Litecoin.

243
00:16:25,000 --> 00:16:26,000
Then there was like Ethereum.

244
00:16:26,000 --> 00:16:28,000
Then there was like whatever.

245
00:16:28,000 --> 00:16:32,000
So new stuff is being invented all the time.

246
00:16:32,000 --> 00:16:35,000
And then Ethereum gets invented and everyone says this idea sucks.

247
00:16:35,000 --> 00:16:36,000
But then it does a little bit of success.

248
00:16:36,000 --> 00:16:37,000
Then you have copycats.

249
00:16:37,000 --> 00:16:41,000
You have Solana, Base, whatever the hell, Polygon, et cetera.

250
00:16:41,000 --> 00:16:44,000
So you have all these – everyone is copying Evium, Avalanche.

251
00:16:44,000 --> 00:16:48,000
So you have all these things being invented.

252
00:16:48,000 --> 00:16:49,000
And there's no limit.

253
00:16:49,000 --> 00:16:53,000
We have no way of predicting what someone will invent tomorrow.

254
00:16:53,000 --> 00:16:55,000
And we have no way of knowing how good that idea is.

255
00:16:55,000 --> 00:16:58,000
It could be really, really good.

256
00:16:58,000 --> 00:17:00,000
I tried to explain this to Michael Saylor once.

257
00:17:00,000 --> 00:17:02,000
I had the opportunity to meet him in person.

258
00:17:02,000 --> 00:17:04,000
This was like years ago.

259
00:17:04,000 --> 00:17:10,000
And I said there was a time before you heard about Bitcoin.

260
00:17:10,000 --> 00:17:12,000
You were going through your whole life and you had never heard of Bitcoin.

261
00:17:12,000 --> 00:17:14,000
And then, bang, new idea.

262
00:17:14,000 --> 00:17:16,000
And you're like, whoa, this is amazing.

263
00:17:16,000 --> 00:17:18,000
And I was like that could just happen again tomorrow.

264
00:17:18,000 --> 00:17:20,000
Like it happened 100 times.

265
00:17:20,000 --> 00:17:22,000
Maybe not, but it could.

266
00:17:22,000 --> 00:17:25,000
So there's no limit to what the great invention could be.

267
00:17:25,000 --> 00:17:31,000
So we've got to really be worried about how smart other people are

268
00:17:31,000 --> 00:17:32,000
and what they might come up with.

269
00:17:32,000 --> 00:17:34,000
So in Bitcoin we need to have like this plan for that.

270
00:17:34,000 --> 00:17:37,000
The side chain is kind of like a pressure release valve.

271
00:17:37,000 --> 00:17:39,000
If someone invents a really good idea,

272
00:17:39,000 --> 00:17:43,000
you just take it as an L2 and then you say thank you for that great idea.

273
00:17:43,000 --> 00:17:46,000
Instead, we do all this weird circus.

274
00:17:46,000 --> 00:17:47,000
I don't know.

275
00:17:47,000 --> 00:17:48,000
We do this weird thing.

276
00:17:48,000 --> 00:17:52,000
We just say we're the best and everyone's going to come crawling back to Bitcoin

277
00:17:52,000 --> 00:17:58,000
after they're done playing with meme coins.

278
00:17:58,000 --> 00:18:00,000
That's amazing.

279
00:18:00,000 --> 00:18:02,000
So let's move forward.

280
00:18:02,000 --> 00:18:06,000
So what I was saying is let's assume this thunder will work.

281
00:18:06,000 --> 00:18:11,000
Let's assume that this experiment they're going to do is going to stick

282
00:18:11,000 --> 00:18:13,000
and people are going to start using it.

283
00:18:13,000 --> 00:18:16,000
I just wanted to understand how the process of thunder

284
00:18:16,000 --> 00:18:21,000
or this L2 or drive chain will work on eCash.

285
00:18:21,000 --> 00:18:22,000
What is the process?

286
00:18:22,000 --> 00:18:28,000
And this is where I think the 301 slash the blind merge mine comes in, right?

287
00:18:28,000 --> 00:18:31,000
Yeah, merge mining was invented by Satoshi.

288
00:18:31,000 --> 00:18:33,000
It was co-invented by him and someone else.

289
00:18:34,000 --> 00:18:36,000
But he was a supporter.

290
00:18:36,000 --> 00:18:39,000
Again, you can see how far we've come

291
00:18:39,000 --> 00:18:45,000
and how far we've descended into chaos and madness because we had Bitcoin

292
00:18:45,000 --> 00:18:48,000
and then someone brings up this thread about a BitDNS,

293
00:18:48,000 --> 00:18:51,000
which became Namecoin and which I have turned into BitNames

294
00:18:51,000 --> 00:18:53,000
because it's a fantastic idea.

295
00:18:53,000 --> 00:18:57,000
But Satoshi helps the person invent BitNames,

296
00:18:57,000 --> 00:19:02,000
and then Satoshi says, actually, we can mine both blockchains at once.

297
00:19:02,000 --> 00:19:05,000
So nothing like this would happen today.

298
00:19:05,000 --> 00:19:06,000
Nothing like any of this would happen today.

299
00:19:06,000 --> 00:19:09,000
They'd say, oh, you don't want to even do this alternative coin.

300
00:19:09,000 --> 00:19:12,000
You're a scammer for even talking about Namecoin.

301
00:19:12,000 --> 00:19:16,000
But Satoshi was like, actually, there's a way of mining both at once.

302
00:19:16,000 --> 00:19:20,000
He said what we should do is we should do this for every blockchain.

303
00:19:20,000 --> 00:19:23,000
So Satoshi is just coming out and saying there's going to be all these different
blockchains.

304
00:19:24,000 --> 00:19:28,000
This is a thread that absolutely everyone should read on the original forum called
BitDNS

305
00:19:28,000 --> 00:19:30,000
and Generalizing Bitcoin.

306
00:19:30,000 --> 00:19:34,000
It will only take you maybe like 20 minutes to read.

307
00:19:34,000 --> 00:19:40,000
But it's fantastic because Satoshi clearly expects there to be many different
blockchains,

308
00:19:40,000 --> 00:19:43,000
and he does not care in the slightest.

309
00:19:43,000 --> 00:19:46,000
He does not have any kind of like what you might call toxicity,

310
00:19:46,000 --> 00:19:51,000
or he just thinks like, oh, of course people will just invent more blockchain.

311
00:19:51,000 --> 00:19:56,000
But, again, you can see that's completely unlike what it's like today where it's
very political

312
00:19:56,000 --> 00:19:59,000
and it's very like people are very critical of each other.

313
00:19:59,000 --> 00:20:01,000
They say you shouldn't even buy.

314
00:20:01,000 --> 00:20:03,000
This is the only thing you need.

315
00:20:03,000 --> 00:20:06,000
And so merge mining has been around for a very long time.

316
00:20:06,000 --> 00:20:11,000
I tuned it up slightly in 2017, this idea of the blind merge mining.

317
00:20:11,000 --> 00:20:17,000
As far as I'm aware, there is no real controversy about this where most people seem
to accept

318
00:20:18,000 --> 00:20:25,000
that blind merge mining is a slightly different version of merge mining that is
better in some ways

319
00:20:25,000 --> 00:20:32,000
and is slightly worse in a few other ways, and it itself requires a soft fork to
work.

320
00:20:32,000 --> 00:20:34,000
Back in 2017, that wasn't a big deal.

321
00:20:34,000 --> 00:20:36,000
We did soft forks all the time.

322
00:20:36,000 --> 00:20:40,000
So none of this was a big deal back then.

323
00:20:40,000 --> 00:20:43,000
Today, of course, the fact that it would require a soft fork,

324
00:20:43,000 --> 00:20:50,000
it would be you would make headlines today if you said something like you had the
original blind merge mining idea

325
00:20:50,000 --> 00:20:54,000
and then someone said we have a new way of doing merge mining without a soft fork,
but it's worse.

326
00:20:54,000 --> 00:20:55,000
Everyone would jump at that.

327
00:20:55,000 --> 00:20:57,000
They would say that's amazing.

328
00:20:57,000 --> 00:21:05,000
Of course, that just, again, it speaks to how different everything is and how crazy
everyone has become for no reason.

329
00:21:05,000 --> 00:21:08,000
But, anyway, merge mining is this thing Satoshi invented.

330
00:21:08,000 --> 00:21:10,000
It's totally ingenious.

331
00:21:11,000 --> 00:21:14,000
The miners don't have to do any additional thermodynamic work.

332
00:21:14,000 --> 00:21:20,000
They do need a node of each network, but that's relatively cheap because they're
spending all this money.

333
00:21:20,000 --> 00:21:24,000
They have all this electricity coming in, and usually they connect to the pool.

334
00:21:24,000 --> 00:21:26,000
The pool does that anyway.

335
00:21:26,000 --> 00:21:29,000
The pool says make this exact block, so they don't even care.

336
00:21:29,000 --> 00:21:34,000
It doesn't affect them at all, which lessens the appeal of blind merge mining

337
00:21:34,000 --> 00:21:37,000
because now there's so much specialization that it doesn't even matter anymore.

338
00:21:38,000 --> 00:21:39,000
So nothing even.

339
00:21:39,000 --> 00:21:46,000
In a way, actually, the fact that mining has specialized so much where you have
people who produce the node.

340
00:21:46,000 --> 00:21:48,000
You have Bitcoin Core.

341
00:21:48,000 --> 00:21:49,000
You have nodes.

342
00:21:49,000 --> 00:21:54,000
You have node runners, and you have the pool, who's their own specialist, and you
have the hashers.

343
00:21:54,000 --> 00:22:04,000
That has kind of like passively created a blind merge mining situation just based on
the brand of the pool and its reputation.

344
00:22:04,000 --> 00:22:11,000
So it's already the individual hasher, the guy who owns the ASIC, they already don't
even see.

345
00:22:11,000 --> 00:22:13,000
They're blind to most of it anyway.

346
00:22:13,000 --> 00:22:17,000
They just have the brand of the pool that they either trust the brand of the pool.

347
00:22:17,000 --> 00:22:24,000
So a lot of it is not necessary or maybe just kind of superfluous, but of course it
doesn't really cost anything either.

348
00:22:24,000 --> 00:22:26,000
It's just some software, so it's whatever.

349
00:22:26,000 --> 00:22:28,000
So that's kind of the situation.

350
00:22:28,000 --> 00:22:30,000
Merge mining is a very fascinating thing,

351
00:22:30,000 --> 00:22:34,000
because it lets the miner collect fees from multiple blockchains without doing
anything.

352
00:22:34,000 --> 00:22:37,000
Yeah, the specific question I guess I wanted to understand.

353
00:22:37,000 --> 00:22:43,000
I think merge mining and obviously blind merge mining is very fascinating and it's
very usable.

354
00:22:43,000 --> 00:22:50,000
But the thing I wanted to understand is how a thunder block, because I think it will
apply to all of the drive chains, right?

355
00:22:50,000 --> 00:23:01,000
So how does a thunder block in this drive chain example broadcast itself to the
e-cash chain, right?

356
00:23:01,000 --> 00:23:02,000
You mean L1?

357
00:23:02,000 --> 00:23:05,000
To L1, yeah, because that needs to go to L1, right?

358
00:23:05,000 --> 00:23:06,000
It's very important.

359
00:23:06,000 --> 00:23:08,000
Yeah, because one direction is much easier than the other.

360
00:23:08,000 --> 00:23:15,000
So the deposits are quite easy, because you just say that the thunder must reference
the L1 node.

361
00:23:15,000 --> 00:23:19,000
And that's quite easy, because in one direction it's mandatory, in the other
direction it's optional.

362
00:23:19,000 --> 00:23:24,000
So on one day when you run the thunder node, you're signing up for more node cost.

363
00:23:24,000 --> 00:23:27,000
So you just run the L1 node plus the thunder node.

364
00:23:27,000 --> 00:23:31,000
Your computer just looks at the L1 node and says, oh, someone made a deposit.

365
00:23:31,000 --> 00:23:32,000
They deposited the coins.

366
00:23:32,000 --> 00:23:38,000
So I just want to sketch this out, because maybe it's easier for people to
understand that the whole picture is like,

367
00:23:38,000 --> 00:23:41,000
you've got to have coins being moved in and moved out,

368
00:23:41,000 --> 00:23:47,000
and you have to have a way of doing what they call consensus for the L2.

369
00:23:47,000 --> 00:23:52,000
In this case, the consensus for the L2, finding the blocks, determining who has what
money,

370
00:23:52,000 --> 00:23:55,000
that is the merge mining that we already discussed.

371
00:23:55,000 --> 00:24:00,000
And I bring this up because just to kind of reassure people, like, okay, this was
invented a long time ago.

372
00:24:00,000 --> 00:24:04,000
It's been in use with Namecoin since 2011.

373
00:24:04,000 --> 00:24:08,000
And, in fact, the Bitcoin network already merge mines like 11 or 13 coins.

374
00:24:09,000 --> 00:24:13,000
One interesting thing is it's impossible to tell from the perspective only of
Bitcoin.

375
00:24:13,000 --> 00:24:17,000
You don't know how many other chains are being merge mined.

376
00:24:17,000 --> 00:24:23,000
And as another interesting trivia fact, Bitcoin BTC cannot stop.

377
00:24:23,000 --> 00:24:25,000
They cannot prevent you.

378
00:24:25,000 --> 00:24:28,000
It doesn't even – you can't detect it.

379
00:24:28,000 --> 00:24:32,000
There may be 3,000 altcoins that are being merge mined with Bitcoin,

380
00:24:32,000 --> 00:24:37,000
and you cannot stop them from being merge mined with Bitcoin, which is very
counterintuitive.

381
00:24:37,000 --> 00:24:39,000
Merge mining is very interesting.

382
00:24:39,000 --> 00:24:44,000
With blind merge mining, you could because it's more tightly created, but it's more
efficient in some other ways.

383
00:24:44,000 --> 00:24:49,000
Anyway, I saw a bunch of minutiae to just say that it's exactly what you've asked.

384
00:24:49,000 --> 00:24:51,000
You've asked about the most important part.

385
00:24:51,000 --> 00:24:54,000
I just try to tell everyone every other part is actually easy.

386
00:24:54,000 --> 00:24:57,000
And that had all been figured out before 2015.

387
00:24:57,000 --> 00:25:00,644
But then I had my idea for how the coins come back.

388
00:25:00,644 --> 00:25:27,644
And the idea was, this is the idea. So this is the whole idea of DriveChain. Some
people think this is a great idea, the greatest idea in the world. Others hate this
idea, and they think it's a stupid idea, and it's terrible. But here it is. My
position on what DriveChain is – I know I'm winding this up here, but it's like, I
just think DriveChain is better than the Lightning Network, better than altcoins,
better than – like, I just have all these other things.

389
00:25:27,644 --> 00:25:38,144
Altcoins compete better than just having a custodial L2. So I think this is our best
current idea. There are roll-ups and stuff. I think those ideas are worse than
DriveChain, as we can explain.

390
00:25:38,144 --> 00:25:51,644
But here is – now, without any further delay, the idea is this, which is that the
sidechain L2 can compress everything that it's doing, in particular all the
withdrawals initiated on L2.

391
00:25:52,644 --> 00:26:02,144
So the sidechain L2 knows the whole picture. It knows all the deposits. It knows all
the L2 transactions, and it knows all the L2 withdrawals, and it knows everything
happening on L1.

392
00:26:02,144 --> 00:26:15,644
So the sidechain L2, it will be able to say this is exactly the kind of transaction
that would pay out all the people who want out, and they can compress that
transaction in one TXID, one hash basically.

393
00:26:16,644 --> 00:26:24,144
And so over very slow periods – we're talking like three months – it would just
broadcast the hash.

394
00:26:24,144 --> 00:26:32,144
It's like – I have this idea, this video. If you go to layer2labs.com, we have a
cool video that we made that was like – people draw out the thing.

395
00:26:32,144 --> 00:26:39,144
It was before AI was invented, and it was like people drew out each – so the idea is
you get Earth and Mars. Mars is like the sidechain.

396
00:26:39,644 --> 00:26:45,644
And on Mars, everyone – they go to the town square, and they unfurl this big banner
that has like the hash.

397
00:26:45,644 --> 00:26:50,644
It's just the one thing that you need, and they hold it up there for like three
months.

398
00:26:50,644 --> 00:27:08,644
They hold it up, and then on Earth – okay, so this is what comes back to Earth is
just this one hash, and then basically the transaction itself, which is the minimum
amount that you would need to make it – you need to know – you eventually need to
broadcast this in one block and pay these people out.

399
00:27:09,144 --> 00:27:14,144
So somewhere, this needs to be the hash and the actual transaction paying everyone
out.

400
00:27:14,144 --> 00:27:20,144
This is like pay four coins to this person, pays 7.2 coins to this person, or et
cetera.

401
00:27:21,144 --> 00:27:26,144
You have to get that from the L2, but you can get it from any – 100% of the L2 nodes
have it.

402
00:27:26,144 --> 00:27:37,144
And of course, this transaction is going to be – it's one 32-byte hash, and then
maybe like tens of thousands of bytes or something very, very tiny.

403
00:27:37,644 --> 00:27:42,644
Now, so that is – and then on L1, you have the hash, and then the miners.

404
00:27:42,644 --> 00:27:43,644
This is what they call SPV proof.

405
00:27:43,644 --> 00:27:44,644
I just have the miners.

406
00:27:44,644 --> 00:27:46,644
You can either increment it by one.

407
00:27:46,644 --> 00:27:48,644
They have like a little counter.

408
00:27:48,644 --> 00:27:58,644
They increment it by one, or they decrease it by one, or they leave it the same or
something, and it has to very slowly reach this huge threshold.

409
00:27:58,644 --> 00:27:59,644
So it has to match.

410
00:27:59,644 --> 00:28:03,644
You have to get wide agreement from all the – this is the miners on L1.

411
00:28:04,144 --> 00:28:17,144
But it's set up in a way to deter fraud basically because if you want to steal from
the sidechain, you have to somehow get the – you have to make a fake transaction and
get a fake hash.

412
00:28:17,144 --> 00:28:22,144
And then you have to get – somehow like get everyone to go for your hash instead.

413
00:28:22,144 --> 00:28:25,144
Meanwhile, every single person running the L2 node knows what the real hash is
automatically.

414
00:28:25,144 --> 00:28:27,144
They all know what it is.

415
00:28:27,144 --> 00:28:29,144
So it's like a flagrant lie.

416
00:28:29,644 --> 00:28:43,644
And then you have to somehow keep this going for three months with the L1 people
each incrementing it where they don't decide either to decrease it and reject it or
just to do nothing and say I don't exactly understand what's happening right now.

417
00:28:43,644 --> 00:28:46,644
Let me explain that there's a couple other things.

418
00:28:46,644 --> 00:28:49,644
Okay, so some people complain about how slow this is.

419
00:28:50,144 --> 00:29:00,144
But actually, this is – by design, this is intentional, and this is actually a good
thing because there's already these ways of doing instantaneous swaps.

420
00:29:00,144 --> 00:29:02,144
And many people even do this now.

421
00:29:02,144 --> 00:29:06,144
So they just use these swap providers or they just go on Coinbase and just trade the
coin.

422
00:29:06,144 --> 00:29:17,144
So you can always – if you want – if you find a willing participant, it goes back to
the comparative advantage point we were talking about earlier where it's like you
can instantly swap out.

423
00:29:17,644 --> 00:29:23,644
So that's not the relevant issue, and a lot of people are confused or dismayed.

424
00:29:23,644 --> 00:29:25,644
They think, wow, it's three months.

425
00:29:25,644 --> 00:29:27,644
That's like an absurdly long time.

426
00:29:27,644 --> 00:29:29,644
They think how could that possibly work.

427
00:29:29,644 --> 00:29:31,644
But that's not the situation.

428
00:29:31,644 --> 00:29:45,644
What's really happening is there would be regular people consensually swapping, and
then they'd say like for $0.99 on the dollar or for whatever it is, some tiny fee,
I'll pay you L1 coins today.

429
00:29:46,144 --> 00:29:47,144
You give me all the L2 coins.

430
00:29:47,144 --> 00:29:49,144
And then it's only the net effect.

431
00:29:49,144 --> 00:29:54,144
People would passively bundle up on the L2s.

432
00:29:54,144 --> 00:29:57,144
There would only be like a few people who are willing to wait patiently.

433
00:29:57,144 --> 00:29:59,144
They would move.

434
00:29:59,144 --> 00:30:01,144
These would be like bond traders or something because they get a tiny yield.

435
00:30:01,144 --> 00:30:06,144
It's like a three-month CD or as we would call it in the US.

436
00:30:06,144 --> 00:30:08,144
No one even does this anymore.

437
00:30:08,144 --> 00:30:10,144
After 2008, they're like zero.

438
00:30:10,144 --> 00:30:12,144
A CD.

439
00:30:12,144 --> 00:30:14,144
All right.

440
00:30:14,644 --> 00:30:15,644
I have some questions.

441
00:30:15,644 --> 00:30:19,644
So I think I'm a little bit not sure on the three-months part.

442
00:30:19,644 --> 00:30:27,644
But before that, though, I'm assuming that obviously from layer 2s, drive chain
layer 2s, the block gets included into layer 1.

443
00:30:27,644 --> 00:30:32,644
Blind merge mining, the hash of the L2 block does make it into the L1 coinbase.

444
00:30:32,644 --> 00:30:34,644
After that, L2 goes to that.

445
00:30:34,644 --> 00:30:35,644
Blind merge mining.

446
00:30:35,644 --> 00:30:37,644
And there is a little bit of fee involved with that.

447
00:30:37,644 --> 00:30:39,644
There's a bidding process for the L1 to include.

448
00:30:39,644 --> 00:30:41,644
This is a different thing.

449
00:30:42,144 --> 00:30:44,144
The main withdrawals are BIP-300.

450
00:30:44,144 --> 00:30:47,144
And the blind merge mining is 301.

451
00:30:47,144 --> 00:30:54,144
And it's useful to separate them because as I've tried to claim, the merge mining
part is really not that controversial.

452
00:30:54,144 --> 00:30:57,144
And kind of people mostly accept that part.

453
00:30:57,144 --> 00:31:07,144
Whereas BIP-300 is like people have all kinds of strong opinions about it being
really great or being terrible or being a waste of time or being whatever.

454
00:31:07,644 --> 00:31:19,644
So I wanted to highlight what you said before about it's the withdrawals that are by
far – this is the whole – everything is bet on this one problem.

455
00:31:19,644 --> 00:31:20,644
And the deposits are easy.

456
00:31:20,644 --> 00:31:23,644
And the merge mining is easy.

457
00:31:23,644 --> 00:31:29,644
And this is the really new experimental part that will either work or not.

458
00:31:29,644 --> 00:31:30,644
And it's the withdrawals.

459
00:31:30,644 --> 00:31:35,644
So this is – I'm just reminding you that now you've switched completely to the other
thing.

460
00:31:36,144 --> 00:31:40,144
You can have merge mining of an altcoin or of an L2.

461
00:31:40,144 --> 00:31:44,144
I have a very unique point of view that is not shared by many Bitcoiners.

462
00:31:44,144 --> 00:31:52,144
So I say only the merge mined L2s will even survive because you are in a situation
where you may be fighting the miners for the fee revenue.

463
00:31:52,144 --> 00:31:58,144
If you're merge mining, then the miners automatically get all the fee revenue which
is what you were talking about now.

464
00:31:58,644 --> 00:32:10,644
And I think that's a big – a really, really big detail because it means that they
will never – they will be happy about the L2 existing instead of resentful and
annoyed.

465
00:32:10,644 --> 00:32:24,644
Whereas if they would be in a situation where you have, for example, you have one
ARK supernode or a lightning service provider is making – because remember I was
saying the earth has maybe 10 trillion transactions, 15 trillion transactions per
year.

466
00:32:25,144 --> 00:32:32,144
So if you take $0.10 out of each or $0.01 out of each, this is hundreds of billions
of dollars in revenue per year.

467
00:32:32,144 --> 00:32:35,144
And this is something that grows geometrically over time.

468
00:32:35,144 --> 00:32:39,144
So this is a gigantic pile of income.

469
00:32:39,144 --> 00:32:49,144
And so if that's going to ARK supernode or lightning or whatever and the miners are
getting nothing, the miners will then be annoyed.

470
00:32:49,644 --> 00:32:52,644
You'll be in this disruptive situation.

471
00:32:52,644 --> 00:32:57,644
Whereas with merge mining, the miners are totally indifferent between a transaction
L1 or L2.

472
00:32:57,644 --> 00:32:59,644
They get paid either way.

473
00:32:59,644 --> 00:33:01,644
And then they're going to think, this is my favorite L2 in the world.

474
00:33:01,644 --> 00:33:03,644
They're going to think we love these L2s.

475
00:33:03,644 --> 00:33:05,644
That's the idea.

476
00:33:05,644 --> 00:33:08,644
So we can now explain the bidding thing if you want.

477
00:33:08,644 --> 00:33:09,644
Yes, please.

478
00:33:09,644 --> 00:33:16,644
Yes, the L1 miner, when they mine – I've kind of flipped a little bit about merge
mining around where I say, okay.

479
00:33:17,144 --> 00:33:23,144
You know in the L1 – okay, when you make a Bitcoin Core L1, the coinbase transaction
is the first transaction.

480
00:33:23,144 --> 00:33:25,144
That's where the miner gets paid.

481
00:33:25,144 --> 00:33:28,144
The miner makes – we know that that transaction is made by the miner.

482
00:33:28,144 --> 00:33:32,144
So the miner has to make that because they're using it to pay themselves.

483
00:33:32,144 --> 00:33:34,144
So they say, pay me all the money here.

484
00:33:34,144 --> 00:33:41,144
So what they do is they put a little tiny code in there that corresponds to the L2
block.

485
00:33:41,144 --> 00:33:46,144
Now they don't – it doesn't necessarily have to be a valid L2 block at all.

486
00:33:46,644 --> 00:33:51,644
It could just be a random garble of text that means nothing at all.

487
00:33:51,644 --> 00:33:54,644
And it could in fact be an invalid L2 block.

488
00:33:54,644 --> 00:34:02,644
If it is, this just means that the L2 nodes, which are a separate thing, they will
reject that block.

489
00:34:02,644 --> 00:34:08,644
And they will say – because the L2 has its own coinbase where they collect all the
fees from the L2 block.

490
00:34:08,644 --> 00:34:12,644
And they'll just say, we didn't find a block this period.

491
00:34:12,644 --> 00:34:19,644
We need to go back and mine on the – because whatever this is is not – this isn't
block 700,004.

492
00:34:19,644 --> 00:34:21,644
This is just nothing.

493
00:34:21,644 --> 00:34:27,644
And we need to go back to 700,003 and make a new 700,004, which is exactly what they
will do.

494
00:34:27,644 --> 00:34:29,644
And that's perfectly acceptable.

495
00:34:29,644 --> 00:34:31,644
That's how blockchains work.

496
00:34:32,644 --> 00:34:41,644
But the reason I bring that up is because the blind merge mining part is that the L2
nodes and the L1 miners,

497
00:34:41,644 --> 00:34:48,644
who would maybe be separate people, they can still cooperate in a trustless way.

498
00:34:48,644 --> 00:34:57,644
Because every – so if you run the L2 node, you automatically – by definition, you
have an L1 node also.

499
00:34:57,644 --> 00:34:59,644
And you probably have some L1 coins.

500
00:34:59,644 --> 00:35:01,644
So it's the same person.

501
00:35:01,644 --> 00:35:03,644
The person running the L2 node –

502
00:35:03,644 --> 00:35:05,644
Why is that?

503
00:35:05,644 --> 00:35:10,644
Why would they have to have – if I'm running Thunder Node, why do I have to have
e-cash?

504
00:35:10,644 --> 00:35:11,644
That's how all the L2s work.

505
00:35:11,644 --> 00:35:13,644
Even the Lightning Network works that way.

506
00:35:13,644 --> 00:35:15,644
In order to run the Lightning Node, you need Bitcoin Core.

507
00:35:15,644 --> 00:35:19,644
But of course, a lot of people cheat and they just do custodial Lightning.

508
00:35:19,644 --> 00:35:23,644
No one knows any of this lore because nobody would care.

509
00:35:23,644 --> 00:35:28,644
That's true, but it wouldn't be true for all the other blockchains because that's
not true for all blockchains.

510
00:35:28,644 --> 00:35:31,644
Lightning, yes, but outside of Bitcoin ecosystem –

511
00:35:31,644 --> 00:35:37,644
Most L2s – some of the L2s are fully custodial anyway, so it's actually pointless to
even –

512
00:35:37,644 --> 00:35:42,644
like if you say liquid, in order to run a liquid node, you need to run Bitcoin Core.

513
00:35:42,644 --> 00:35:48,644
And it kind of doesn't matter because you kind of can't even run a liquid node
because you don't have the keys.

514
00:35:48,644 --> 00:35:57,644
So it's kind of an interesting – it is a very interesting thing to unpack that like
what most people have decided is that they don't even care

515
00:35:57,644 --> 00:36:00,644
because they're just going to trust the brand of the project.

516
00:36:00,644 --> 00:36:03,644
They're going to trust Fediment or something, and they just –

517
00:36:03,644 --> 00:36:04,644
Yeah.

518
00:36:04,644 --> 00:36:10,644
But if you're willing to run the L2 node, the L1 node is very inexpensive relative.

519
00:36:10,644 --> 00:36:11,644
That's true.

520
00:36:11,644 --> 00:36:22,644
In fact, each L2 node must have – one easy way of seeing why it's a technical
requirement is that the L2 node needs to know who is deposited to it.

521
00:36:22,644 --> 00:36:23,644
I see.

522
00:36:23,644 --> 00:36:26,644
And how would they get that information if not from the L1 node?

523
00:36:26,644 --> 00:36:31,644
You would have to like get it from someone else running an L1 node, or what's the
point?

524
00:36:31,644 --> 00:36:32,644
I see, I see, I see.

525
00:36:32,644 --> 00:36:38,644
I think that's where I wasn't connecting with you because I wasn't getting that the
L2 also has to run L1.

526
00:36:38,644 --> 00:36:40,644
So I think I'm clear, a bit more clear.

527
00:36:40,644 --> 00:36:41,644
Yeah.

528
00:36:41,644 --> 00:36:42,644
Yeah.

529
00:36:42,644 --> 00:36:48,644
That's also why the deposits are super easy anyway because the – since it would be
required anyway.

530
00:36:48,644 --> 00:36:53,644
Another thing is like how does the L2 know when the L1 turned the L2 on?

531
00:36:53,644 --> 00:36:54,644
You know what I mean?

532
00:36:54,644 --> 00:36:58,644
Like let's say we put out Thunder software, but people use it on Litecoin and on
Bitcoin.

533
00:36:58,644 --> 00:37:00,644
But they start it up on different dates.

534
00:37:00,644 --> 00:37:01,644
You know what I mean?

535
00:37:01,644 --> 00:37:07,644
So they don't even – it has to know like when was I created basically.

536
00:37:07,644 --> 00:37:13,644
That's actually – yeah, there's a lot of questions actually flowing through.

537
00:37:13,644 --> 00:37:14,644
But no, this is a beautiful discussion.

538
00:37:14,644 --> 00:37:15,644
I think we can keep going.

539
00:37:18,644 --> 00:37:19,644
Thank you.